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The multilateral Climate Investment Funds said on Thursday it would invest up to $1 billion to help accelerate the development of technologies to cut climate-damaging industrial sector emissions in developing countries.
The group, which works with the World Bank and other leading international lenders, is an important cog in development finance as it is able to take on more risk and offer money at cheaper rates, which in turn helps other investors to join in.
Ahead of the 15th Clean Energy Ministerial (CEM15) in Brazil on Thursday, CIF said in a statement the money - funded through CIF's $8.6 billion Clean Technology Fund - would help decarbonize sectors such as cement, steel, iron and chemicals.
They currently account for around a quarter of global greenhouse gas emissions, and demand is set to grow sharply by mid-century, in part because of the need for more of all of those materials in the shift to a low-carbon economy.
"The future depends on decarbonizing heavy emitting sectors. To meet our climate goals, we need industry's emissions to decline by 20% by 2030 and 93% by 2050," CIF Chief Executive Tariye Gbadegesin said.
To reduce the environmental impact of the sector, CIF's industry decarbonization program will aim to fund cleaner ways of working and for the first time will accept joint pitches for investment from public and private organizations.
After first announcing the launch of the program at global climate talks in 2022, countries are now able to apply for funds for the first time, with expressions of interest due by Jan. 17.
Finance is set to be a central focus of the next round of global talks, COP29, in Azerbaijan in November, with richer countries being pushed by many poorer countries to agree a new annual commitment $1 trillion or more.
"Speeding up the decarbonisation of steel, iron and cement in emerging markets around the world is how we will reduce global emissions and accelerate the clean energy transition," Britain's Minister for Climate, Department for Energy Security and Net Zero Kerry McCarthy said.
(Reporting by Simon Jessop; Editing by Jamie Freed)